Guardian Money tells you how you can save more than £400 on credit and debit cards, foreign exchange, car hire and airport parking before you even leave for your next holiday.
Picking the wrong plastic to use while abroad could quite easily set you back £100 in fees and hidden commission, according to new research.
However, by being card sharp when you're buying items and withdrawing money, you can get the bill down to a fraction of that – and, in some cases, reduce it to zero.
If you're a Norwich & Peterborough building society Gold Classic current account holder, you're sorted because this is one of the very few UK bank accounts that offers completely free debit card usage abroad, with no nasties lurking in the small print.
For the rest of us, the best bet may be the Halifax Clarity credit card, which charges nothing for foreign exchange, and doesn't impose ATM fees either.
N&P's Gold Classic account and the Halifax Clarity card came out top in a comprehensive survey of debit and credit card overseas charges carried out by Andrew Hagger of personal finance website MoneyComms.co.uk (see table).
Metro Bank – a relatively new player with branches mainly in the London area – also scored highly, as its debit and credit cards are free of fees, provided you are within Europe.
One of the big problems for consumers is that the fees and charges for using your plastic abroad are often bewilderingly complex, with stacks of jargon and small print. Someone using their debit card to withdraw cash from a foreign ATM may well find they are charged 2.75% to 3% of the money in hidden commission, plus a separate ATM fee that is usually expressed as a percentage of the amount taken out. For example, NatWest's ATM fee is 2% of the value, with a minimum of £2 and a maximum of £5, whereas the recently launched M&S Bank current account doesn't impose an ATM fee.
If you have a Halifax, Santander, Lloyds or TSB debit card, be aware that they all impose a fixed fee for overseas purchases in shops, restaurants etc – and that's on top of the 2.75% to 3% they take off you for "currency conversion". The fixed fee is £1.50 at Halifax, £1.25 at Santander and £1 at Lloyds and TSB. It is applied on each transaction – ie, every time you buy something. You can see why MoneySavingExpert.com's Martin Lewis has dubbed them "the cards from hell" to be avoided at all costs.
Hagger says it's important to check the charges that apply to your card before you head off. "At least if you understand the overseas charges, you can adapt your spending accordingly. For example, you don't want to be making cash withdrawals or purchases of £10 or £20 if you're going to be hit with £1.50-plus each time," he says.
The Halifax Clarity card boasts that it has "no fee to use it anywhere worldwide". It applies MasterCard's exchange rate at the time you make the transaction, and does not add any "loading" fees or charges. In addition, it won't charge for ATM withdrawals. But make sure you're paying off your bill in full every month. There is no interest-free period on cash withdrawals, so you pay interest from the day you take the money out. However, the representative APR is a not-bad 12.9%, meaning a £100 withdrawal would cost just over £1 in interest at the end of the month.
Meanwhile, don't fall for the "dynamic currency conversion" trap while you are away. If a shop, restaurant or hotel gives you the option to pay in sterling, rather than the local currency, insist you pay in the latter. The same applies to ATMs.
"I was asked if I wanted to pay in sterling at least half a dozen times while in Valencia a month ago," says Hagger. "Although you may think it's useful to know exactly how much you'll be debited, the downside is that it gives the retailer the opportunity to use a poor local bank exchange rate, which could see you paying well over the odds – in some cases by 3% or 4%. Always choose to pay in the currency of the country you're visiting." RJ